The naira depreciated to an average of $/N1,667.41 in November 2024, marking a 2.14 per cent decline from the $/N1,631.71 recorded in October 2024.
This is according to the FMDQ Markets Monthly Report released on Tuesday.
It noted that the local currency traded within a range of $/N1,639.50 to $/N1,690.37 during the month.
“Naira depreciated against the US dollar in the FX market, with the spot exchange rate ($/N) increasing by 2.14% ($/N35.70) to close at an average of $/N1,667.41 in November 2024 from $/N1,631.71 recorded in October 2024, trading within a range of $/N1,639.50–$/N1,690.37,” the report highlighted.
FMDQ is a financial market infrastructure in Nigeria that provides a platform for the trading of various financial instruments, including foreign exchange, fixed income, and derivatives.
The report showed that the Spot FX Market turnover on the FMDQ Exchange reached $14.39 billion (N23.95tn), reflecting a 42.69 per cent increase from October’s turnover of $10.08bn.
This growth in the spot market turnover occurred despite the naira’s depreciation against the US dollar, indicating higher activity and demand in the FX market.
Meanwhile, the derivatives market saw a significant decrease in activity, with the total turnover in the FX market segment dropping by 82.41 per cent month-on-month to $0.49bn (N0.81tn), down from $2.27bn in October 2024.
This sharp decline in the derivatives market was noted as a contrast to the strong performance in the spot market.
The total turnover across both the Spot and Derivatives Markets on the FMDQ Exchange in November 2024 amounted to N59.03tn, representing a 43.18 per cent increase from the previous month and a 111.8 per cent rise compared to the same period last year.
As the naira continues to experience fluctuations, market observers are closely monitoring the regulatory and economic factors influencing these movements, with expectations that the foreign exchange market will continue to see volatility in the coming months.
In June 2023, the Nigerian government implemented a significant devaluation of the naira, allowing it to float freely against the US dollar.
The move aimed to correct an overvalued currency and attract foreign investment, but it has led to increased inflation and a rise in external debt, now estimated at N63.07tn.
Data from the Debt Management Office shows that as of June 1, 2023, Nigeria’s external debt stood at $43.16bn.
At an exchange rate of N770.38 to the dollar, this amounted to N33.25tn. However, by June 1, 2024, the naira had depreciated by 47.6 per cent, with the exchange rate rising to N1,470.19 to the dollar.
